Oil prices closed in the red, breaking away from the longest losing streak in 2018 so far | Anue Juheng-Energy

International oil prices closed in the red on Monday (11th), breaking away from weekly declines so far in 2018. Natural gas fell, reflecting an unusually warm climate that is weighing on heating demand.

energy commodity prices

• West Texas Intermediate crude oil futures for January delivery rose 9 cents, or 0.1%, to settle at $71.32 a barrel. They fell 3.8% last week. They closed in the black for the seventh consecutive week, the longest losing streak since 2018. .
• Delivered in FebruaryBrent crude oil (Brent) futures rose 19 cents, or about 0.3%, to $76.03 a barrel, after falling nearly 3.9% last week.
• Gasoline futures for January delivery fell 0.3% to settle at $2.04 a gallon.
• Delivered in JanuaryThermal Fuel FuturesPrices rose 1.1% to $2.61 per gallon.
• Natural gas futures for January delivery fell 15 cents, or 5.87%, to settle at $2.43 per million Btu, the lowest since June 14.

market drivers

Tyler Richey, co-editor of Sevens Report Research, said that WTI tested this year’s key support price last week (approximately close to $70 per barrel) and rebounded after entering this week, reflecting the short-term oversold condition of the futures market. He said improved investor confidence, coupled with risk-seeking capital flows, also provided support for oil prices.

Oil prices fell for most of the session on Monday, mainly due to a report released by China’s National Bureau of Statistics over the weekend that showed deflation worsening, with the official Consumer Price Index (CPI) falling 0.5%, the largest drop in three years.

Mike O’Rourke, chief market strategist at Jones Trading, said that China’s deepening deflation represents a weakening of the world’s second-largest economy’s demand for industrial commodities including oil. In addition, most countries in Europe are either approaching or have already entered recession. , all clouding the global demand outlook.

O’Rourke said: “China is cooling, European countries are either about to enter recession or are already in recession, and the United States has also cooled since March, although it is still better than elsewhere. This is why our oil price forecast remains at about $70 a barrel. “

Investors remain skeptical that the Organization of the Petroleum Exporting Countries and its partners (OPEC+) will implement its commitment to cut production in the first quarter of 2024. Rania Gule, senior market analyst at

The RBC Capital team released a 2024 commodity outlook report, describing oil as having become a kind of “seeing is believing” market, with traders waiting for more production reduction promises to be fulfilled. The team predicts that prices will continue to fluctuate with no specific direction to follow until the market sees clear data related to voluntary production cuts.

Ole Hansen, head of commodity strategy at Saxo Bank, said even if the U.S. government announced a purchase plan on Monday to fill the strategic petroleum stockpile (SPR), it would still not be enough to drive a lasting rise in oil prices.

Natural gas futures prices fall

Market data showed that natural gas futures prices fell to the lowest since June.

Victoria Dircksen, commodity strategist at Schneider Elctric, said that the National Oceanic and Atmospheric Administration (NOAA) forecast data for the next 8 to 14 days shows that before Christmas, the average temperature in almost all states in the lower latitudes of the United States will be will exceed the historical average.

“Exceptionally mild temperatures are likely to significantly dampen heating demand across the United States, and as production continues to exceed market expectations, supply floods into the market, driving down prices,” Dircksen said.

Quantum Gas & Power Services CEO and President Seth Sewell warned that whenever the market falls deep and fast, there may be an equally strong rebound, but it must be supported by conditions, such as cold weather forecasts and broken natural gas pipelines. wait.